"We think it's happening because of the austerity measures everyone has heard about that the Chinese government has implemented because of a bit of ostentatious behaviour in gift-giving on the part of government officials," Mr Jorgensen said.

"That's had an effect to some extent and there's a possibility as well, I suppose, that other countries have taken some of the market share we were dealing in previously.

"I think people are re-assessing how much they put focus onto China and are starting to consider other markets."

Sales slump compounds earlier problems

The difficulties come on the back of what had already been a prolonged tough period for local producers.

Global economic struggles and an unfavourable exchange rate have severely impacted exports for several years, while the inability of many producers to gain access to store space in large liquor retailers has hampered domestic sales.

"It probably is as tough as it's ever been for the wine industry ... the perfect storm that we speak of - the dollar, the diminishing markets, those sorts of things have certainly come together," Mr Jorgensen said.

"Probably given where we trade in the market, at the premium end, in tough times people assess what they're spending their money on so we may have felt it perhaps a little bit more."

The difficulties in China have not been uniform, with Margaret River producer Murray McHenry saying he has managed to keep his sales to China growing.

"Australian wineries, particularly boutique ones in Margaret River, have had to look offshore for quality markets and China, for us, is proving to be that," he said.

Mr McHenry says the low quality of some of the wine initially sold to China has taken a toll.

"They were sending up wines under labels that no-one in Australia has ever heard of and they were just emptying their tanks of what was known as the 'wine glut' in Australia," he said.

"Australia's reputation was tarnished by these really bad wines that were sent there."

Margaret River Wine Association president Nigel Gallop is confident there is still a big future in Chinese exports for wines in the region.

"I think (the drop in exports) is an adjustment and I think we can grow again from here, as long as we get that message strongly out there that Margaret River is growing great, world-class wines," Mr Gallop said.

"The more we get that message out there to China and the rest of the world, the better this industry is going to be."

Mr Jorgensen said it was "inevitable" that sales to China will rebound.